New Hampshire residential home prices hit an all time high in 2023, spurred on by historically low supply and steady demand from in-state and out-of-state Buyers. As of January 1, 2024, the state-wide median sales price of single family residential homes sits at $470,000, a 7% increase from 2022 and a 57% increase since 2019.
Will 2024 be more of the same? Has the market peaked? Will prices continue to rise even if interest rates start to improve?
Supply & Demand
2023 saw record lows in housing supply levels as many Sellers felt it was a bad time to make a move that would require them to replace the low interest mortgage they were currently holding with much higher rates and home prices up over 57% in the past 5 years. Talk of easing interest rates in the coming year could help some Sellers jump off that fence, which would help boost the supply to more normal levels, but is that enough to cool the market?
Unfortunately for Buyers, the answer is no. The 2024 New Hampshire real estate market should be another good one for Sellers. The remote working trends bolstered during Covid have made New Hampshire a very desirable relocation destination for many people in Southern New England, New York and New Jersey. For some it's about more space, others it's the affordability compared to where they are coming from and for others it's about quality of life or escaping the politics of crowded suburbs and cities. Regardless of the motivation, New Hampshire has become a destination for many out-of-state homebuyers. Adding this additional demand into an already healthy local real estate market will continue to create an imbalance in housing supply and demand and keep prices on the incline for the foreseeable future.
Buying in 2024
Many of the nation's leading economists predict that rates will decline gradually during the year, landing in the vicinity of 6% by year's end, with some more aggressive forecasts estimating rates below 5% in 2025. Buyers will have to weigh the price increases in the market with the slowly declining rates when home shopping. Our suggestion is to get out there early and put your best foot forward with each offer. It's not always about price - creative terms can be a game changer in a multiple offer scenario.
The good news for Buyers is that with inflation rates and mortgage rates on the decline, builders are seizing the opportunity to ramp up production. Nationally, single-family home construction surged 18% in November compared to the prior month and was up 42% compared to a year earlier, the Commerce Department reported this week. Although we won't see new homes flooding the market, since land is at a premium in the state, there should be more opportunities for Buyers looking for new construction than we have seen the last few years.
Selling in 2024
If your timeline is flexible, the best time to sell is early to mid Spring. Prices naturally dip a bit over the winter months. Waiting for a few early 2024 sales to close may help provide the appraiser for your sale higher comparable sales to support a higher price. In other words, imagine your neighbor lists their house in March and receives multiple offers resulting in a sale 10% over asking. If that sale closes around the time that you list, you can justify a higher list price. If your sale gets bid up another 10%, you’ll be happy you waited. Market activity tends to wane in the Summer months and crawl after September, so be cautious not to miss the frenzy of the Spring market altogether.
Selling & Buying in 2024?
Lining up a purchase and sale is a delicate balance that requires some planning. Sellers are still in the driver's seat, which is great for your sale, but not so great on your purchase. Positioning yourself properly and having a plan in place before putting the wheels in motion is critical. A Seller is much more likely to accept your offer if it's not contingent upon the sale of a house that is: a) not on the market or b) not already under agreement, so don't go shopping before having a listing plan in place.
January 15, 2024
Associate Broker, Partner
Hearthside Realty, LLC